Ah, autumn: The evenings turn cooler, the children head back to
school — and the stock market blows up.

The stock market doesn’t always hit trouble in the fall, of
course. But September long has been far and away the worst month for stocks.

And there is plenty to worry about this September: Oil is
approaching $70 a barrel, the Federal Reserve is hard at work raising short-term
interest rates, and September marks the quarter’s end, when companies facing
high analyst expectations may have to warn of profit disappointments.

Since 1900, September is the only month in which the Dow Jones
Industrial Average has fallen more often than it has risen. The Dow industrials
have fallen 1.2% in September, on average, making it the only month with an
average decline of any significance. The industrials fell in each of the past
six Septembers, and in 18 of the 25 from 1980 through 2004. More bull markets
have ended in September than in any other month, according to Ned Davis Research
of Venice, Fla.

For October, the average gain is barely above zero. And when
really bad things happen, they somehow do it in October. That is when stocks
crashed in 1929 and 1987. Of the Dow industrials’ 15 worst one-day percentage
declines, seven came during October."(emphasis mine)

As noted previously, I am looking to buy into the next intermediate lows — which we are on target for, my expectation is from late August to mid-September . . .

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Will September be the Cruelest Month?”

If you study economic history you find that in the early days of the stock market, especially before the Fed was created, there was a very strong seasonal swing in credit and financial flows from city banks to country banks to finance the harvest that significantly impacted the stock market.

So my question is, has this averge changed over time– was Sept a lot worse from 1900 to 1933 and has been about averge since 1950 or has the pattern been staple?

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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